v3.25.4
Derivative Financial Instruments and Hedging Activities
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments and Hedging Activities Derivative Financial Instruments and Hedging Activities
The Company uses derivative and non-derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing earnings and cash flow volatility associated with fluctuations in foreign exchange rates.

Notional Amount of Derivative Contracts
The net notional amounts of the Company’s outstanding derivative instruments were as follows:
As of December 31,
20252024
(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges
$21,066,760 $18,508,390 
Fair value hedges2,884,792 3,819,817 
Derivatives not designated as hedging instruments:
Foreign exchange contracts
1,555,502 1,432,136 
Total
$25,507,054 $23,760,343 
As of December 31, 2025 and December 31, 2024, approximately $1.9 billion and $1.0 billion, respectively, of the Company’s Euro–denominated Senior Notes were designated as hedges of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries.
As of December 31, 2025 and December 31, 2024, the carrying amount of the Company's Euro-denominated Senior Notes (included in “Long-term debt” on the Company's Consolidated Balance Sheets), which were designated as the hedged items in fair value hedges, was approximately $2.9 billion and $3.6 billion, respectively.
See Note 7 Debt for further information on the Company’s debt obligations.
Fair Value of Derivative Contracts
The fair value of the Company’s outstanding derivative instruments was as follows:

 As of December 31, 2025
Derivative AssetsDerivative Liabilities
 Other current assetsOther non-current assetsAccrued expenses and other liabilitiesOther non-current liabilities
 (in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts$192,828 $88,985 $426,341 $214,574 
Derivatives not designated as hedging instruments:
Foreign exchange contracts3,463 — 11,704 — 
Total$196,291 $88,985 $438,045 $214,574 
 As of December 31, 2024
Derivative AssetsDerivative Liabilities
 Other current assetsOther non-current assetsAccrued expenses and other liabilitiesOther non-current liabilities
 (in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts$580,065 $406,677 $303,425 $83 
Derivatives not designated as hedging instruments:
Foreign exchange contracts16,211 — 14,492 — 
Total$596,276 $406,677 $317,917 $83 
The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy. These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies.
As of December 31, 2025, the pre-tax net accumulated loss on our foreign currency cash flow hedges included in AOCI on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $275 million.
Master Netting Agreements
In order to mitigate counterparty credit risk, the Company enters into master netting agreements with its counterparties for its foreign currency exchange contracts which permit the parties to settle amounts on a net basis under certain conditions. The Company has elected to present its derivative assets and liabilities on a gross basis on its Consolidated Balance Sheets.
The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met. Cash collateral received is presented in “Accrued expenses and other liabilities” representing the Company’s obligation to return counterparty cash collateral. Cash collateral posted is presented in “Other current assets” representing the Company’s right to reclaim the cash collateral. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted or received.
The potential offsetting effect to the Company’s derivative assets and liabilities under its master netting agreements and collateral security agreements were as follows:

 As of December 31, 2025
Gross Amount Not Offset in the Consolidated Balance Sheets
 Gross Amount Recognized in the Consolidated Balance SheetsGross Amount Offset in the Consolidated Balance SheetsNet Amount Presented in the Consolidated Balance SheetsFinancial InstrumentsCollateral Received and PostedNet Amount
 (in thousands)
Derivative assets$285,276 $— $285,276 $(282,469)$— $2,807 
Derivative liabilities652,619 — 652,619 (282,469)— 370,150 

 As of December 31, 2024
Gross Amount Not Offset in the Consolidated Balance Sheets
 Gross Amount Recognized in the Consolidated Balance SheetsGross Amount Offset in the Consolidated Balance SheetsNet Amount Presented in the Consolidated Balance SheetsFinancial InstrumentsCollateral Received and PostedNet Amount
 (in thousands)
Derivative assets$1,002,953 $— $1,002,953 $(316,320)$(1,800)$684,833 
Derivative liabilities318,000 — 318,000 (316,320)— 1,680 
Effect of Derivative and Non-Derivative Instruments on Consolidated Financial Statements
The pre-tax gains (losses) on the Company’s cash flow hedges, fair value hedges, and net investment hedges recognized in AOCI were as follows:
Year Ended December 31,
202520242023
(in thousands)
Cash flow hedges:
Foreign exchange contracts
Amount included in the assessment of effectiveness$(1,393,364)$1,195,738 $(155,730)
Fair value hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness(71,999)(14,334)— 
Net investment hedges:
Foreign currency-denominated debt
Amount included in the assessment of effectiveness(144,656)32,400 — 
Total$(1,610,019)$1,213,804 $(155,730)
The gains (losses) on hedged items and derivative instruments recognized in the Consolidated Statement of Operations were as follows:
Year Ended December 31,
2025
RevenuesCost of RevenuesInterest and other income (expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$45,183,036 $23,275,329 $172,459 
Gains (losses) on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI(91,143)1,437 — 
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items— — (470,441)
Derivatives designated as hedging instruments— — 481,416 
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach— — (59,201)
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts— — (97,865)
Year Ended December 31,
2024
RevenuesCost of RevenuesInterest and other income (expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$39,000,966 $21,038,464 $266,776 
Gains on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains reclassified from AOCI124,010 1,629 — 
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items— — 196,660 
Derivatives designated as hedging instruments— — (201,239)
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach— — (23,567)
Gains on derivatives not designated as hedging instruments
Foreign exchange contracts— — 63,291 
No gains or losses on derivative instruments were reclassified from AOCI into the Consolidated Statements of Operations in the year ended December 31, 2023.